Tesla says a second wave of home batteries is creating new energy opportunities

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Battery maker Tesla is seeing a second wave of home battery installations in Australia, as new and existing rooftop solar owners try to maximise the power they get from their homes.

As much as half of Australia’s energy will come from private rooftops by 2050, according to Bloomberg New Energy Finance — and that could open an opportunity for a type of “virtual” power plant.

Virtual power plants (VPP) are networks of buildings – in this case private homes — with rooftop solar and storage that are connected and managed via a software platform.

It’s early days for the concept — and right now the aim is to demonstrate VPPs can make money, Tesla energy director Mark Twidell told the All Energy conference in Melbourne on Wednesday.

A 250 megawatt VPP has been operating in South Australia since January — connected to 100 Tesla batteries installed in public housing. It is designed to scale up to 50,000 homes by 2022.

It’s run by AGL, Tesla, SolarEdge and LG Chem, and is the largest planned in Australia so far.

Energy company Origin also wants to build a 5MW VPP in Victoria.

If the concept is successful it could be good news for ASX-listed producers of battery metals such as lithium, cobalt and graphite.

Rooftop power

Australians are avid adopters of rooftop solar, installing 41 per cent more panels in 2017 than in 2016 and then beating that number of 1.4GW this year — by July.

But as rooftop solar generate most of their power during the day, when few people are at home or using household appliances, owners and companies are still working out how to make the best use of that power.

Further, those systems are connected to the grid in order to feed power in, but they aren’t connected to each other so they can react to the ebbs and flows in the broader energy network.

Figuring out how to make connecting these systems in a virtual private network financially viable for both retailers and consumers is where companies like Tesla come in, says Mr Twidell.

He also says VPPs can even out some of the social costs of rooftop solar — owners of panels can now give back to their community rather than just reaping all of the benefits.

But for investors looking to get into this highly prospective market it’s still a wait and see situation.

Redflow Energy (ASX:RFX) offers residential batteries and a software platform to manage it, and companies like ERM Power (ASX:EPW) and Building IQ (ASX:BIQ) offer commercial building and company-wide energy management systems.

But none has yet dipped a toe into the VPP sector.

BidEnergy and Energy Action are the closest investors will get to companies that are helping business and consumers make money from their energy systems.

BidEnergy runs an online market where power companies can bid for consumer and corporate energy bills.